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Remarks to National Automobile Dealers Association Conference

Wednesday, September 12, 2012

Acting Commerce Secretary Rebecca Blank
Remarks to National Automobile Dealers Association Conference

Thank you, David (Regan). And thanks to Chairman Bill Underriner and your entire board for inviting me. It’s also great to see Senator Baucus, who you just heard from. On behalf of the qdministration, welcome to our nation’s capital.

Since the days of the Model T—for nearly 100 years—America’s auto dealers have been coming here to Washington. You’ve spoken up for auto dealers nationwide —people who are not only leaders in business, but who are also visible and active members of their communities. 

I myself have always loved cars. I lived in Ann Arbor for 10 years before moving here to D.C. Every winter my husband and I drove into Detroit to see what was new at the big Detroit auto show. I’m still fascinated by the innovation in America’s auto industry, and by the new models that show up on your lots each year. And, as Secretary of Commerce, my appreciation for what you do extends more broadly. As you might know, automobile sales are a leading indicator of economic growth. 

What does every American family want once they feel a little more secure about their economic situation? A new car. I think we all saw the numbers last week. You blew away expectations with the best August sales since 2009—nearly 1.3 million cars and trucks sold last month. So far this year, you’re up nearly 20 percent for car sales and over 10 percent for light-duty trucks. I think that deserves a round of applause.

That’s a good sign for our continued economic recovery. When our automakers and dealers are doing well, our entire country typically follows.

Clearly, we’ve come a long way since the recession hit. As you remember, the damage inflicted by the financial meltdown was enormous. It’s easy to forget that at the end of 2008, we were losing about 750,000 jobs every month. At that time, GM and Chrysler, who were already cutting dealerships, couldn’t find financing in the private sector. I know that many voices—including that of this organization—argued that the government was going to have to step up in order to save Detroit. We found a path forward. Chrysler and GM were willing to make difficult decisions that were painful but necessary in order to save the industry, its massive supply chain, and, yes, to ensure that dealers both here and around the world would still be selling American cars today.

Now, I know that some dealers, their workers, and their communities were hit by those decisions. I get it. But the fact is, it could have been much, much worse. If Chrysler and GM liquidated it would have affected nearly all of their dealers. Even back in 2008, experts were saying we could have lost 1.1 million jobs throughout the industry. And, I personally am glad when I still see GM cars in GM dealerships, and people browsing through those cars to see if they want to take one home.

And the auto dealer community is coming back strong. For example, compared to the lowest point in 2009, the number of people employed in auto dealerships has risen by more than 85,000. Of course, the administration also took steps that our auto dealers got behind with their full support, like Cash for Clunkers. That 3-billion-dollar investment stimulated our economy at a crucial moment when we needed consumers to go ahead and buy that new car, instead of holding back.

As you know, it was a success. Not only did Cash for Clunkers help folks like you and your workers get through a tough patch, but it also had a ripple effect of helping auto manufacturers and suppliers who were struggling to keep their workers, and, importantly, it also put safer, cleaner cars on the road.

We applied that same mindset—smart, strategic actions that create jobs and strengthen our economy—to everything we’ve done over the past 3 and one-halfyears. We all know that there is still more work to do and more jobs that need to get created, but because of President Obama’s leadership, and the resilience and hard work of businesses like yours—our private sector has now had 30 straight months of job growth, creating 4.6 million new jobs.

In particular, it’s clear that the American auto industry is back. Last year:

  • GM got back on top as the Number One automaker in the world, with some of the highest profits in its history.
  • Chrysler grew faster in America than any other car company.
  • And Ford rolled out plans to invest billions in U.S. plants and factories, and bring thousands of jobs back home. 

So, today, how can we build on that momentum? What other steps should we be taking as we look to strengthen America’s long-term competitiveness? 

First and foremost, we need to build on the strength we now see in U.S. manufacturing. It’s a particularly bright spot for our economy. As we’ve watched the U.S. economy change—and as we’ve had to compete in a tougher global environment—it has become clear that America’s ability to make things and America’s ability to innovate are tied closely together.  

If we want to stay at the front end of innovation, we have to have production located nearby.

High-end manufacturing—that is, manufacturing that relies on high-tech new processes or that makes new products—is what’s going to keep the U.S. manufacturing industry competitive in a global economy. The fact is, 70 percent of our private sector R&D is funded by manufacturing, and 60 percent of our exports come from manufacturing.

Let me give a specific example of how the Commerce Department is supporting innovation in U.S. auto manufacturing. How many of you have heard of the National Institute for Standards and Technology—NIST?  It’s part of the Commerce Department. I was at NIST headquarters last week in Maryland to see what our engineers have been up to. I toured the Center for Automotive Lightweighting. (Just a warning that I’m going to get a little nerdy on you for a minute.)

As you all know, finding lighter-weight but strong materials for cars can increase fuel efficiency. So the U.S. auto companies are working with each other, with companies like US Steel, and with NIST to test new materials.

To support their research, we used Recovery Act funds to create one-of-a-kind scientific instruments. This will allow—for the first time—automakers to test how these new alloys might protect drivers and passengers during accidents. At the same time, this collaboration is helping the industry turn from 100-year-old manufacturing methods to more innovative ones. So, the project could end up saving hundreds of millions of dollars by reducing trial-and-error in the design process.

In short, while it’s not always visible, well-invested taxpayer dollars are playing a crucial, front-end role to support our manufacturers, to improve safety, and, in the long run, to reduce costs for you and your customers.

The president gets it. He understands that we need to invest in innovation to support the manufacturing sector of tomorrow. That’s why he has worked to reverse the erosion in federal support for basic research and development that took place over the past few decades. That’s also why he has pushed to make community college more affordable so that young people who want to work with cars can get the skills they need.

And he has made big investments in our infrastructure—our roads and bridges. In fact, we’re pushing for even more dollars so that we can put local construction crews back to work and perhaps reduce the number of calls that your busy service departments get from folks who’ve hit potholes.

His commitment—and mine—is that we will continue to push for stronger investments in all of these areas in order to improve business for our auto industry and our auto dealers nationwide.

I want to mention one more crucial area: We need to build on our investments in American innovation by making sure we attract more investments in U.S. production as well. In other words, we want to make sure that the U.S. is home to more factories and more jobs.

There is good news on this front. More and more U.S. firms are bringing jobs back—or “insourcing”—and more and more foreign-owned companies are looking to build factories here.

In my travels across the country, CEOs across many industries are consistently telling me that the U.S. is the best place for their next investment.

The business case for insourcing is getting stronger each day. I already mentioned Ford. They’re bringing back thousands of jobs to the U.S. over the next few years. The president wants to accelerate this trend. He’s calling on Congress to end tax breaks for companies that ship jobs overseas and, instead, give those breaks to companies that bring jobs back.

On a global scale, the U.S. received $227 billion in foreign direct investment that flowed into businesses in this country last year. There are many reasons for this—from our strong energy production levels and falling natural gas prices here at home to our powerful supply chains to our strong entrepreneurial spirit.

And, of course, while other regions of the world are dealing with major economic issues right now, the U.S. continues to have the most powerful, consumer-driven economy in the world. 

For carmakers in particular, having factories in the same country where people are actually buying their cars is important. They can adjust and react more quickly to demand from people like you. So, we see companies like Volkswagen adding a new 700-person shift to its plant in Chattanooga. They’re trying to keep up with demand for the Passat. And BMW is adding 300 jobs with a 900-million-dollar expansion of its South Carolina plant. They will be making the new X4 model here in the U.S.

We need to make sure that this trend continues. After all, if a company makes a big investment here, it’s more likely that those jobs will stay here long-term. That’s why, through an effort called SelectUSA at the Commerce Department, we’re advertising the value of staying in the U.S., if you’re a U.S. firm or investing in the U.S. if you’re a foreign firm.

In particular, we’re going to work more closely with foreign firms that want information on investing here. And then we’ll connect these firms with economic development leaders at the state and local level, as well as folks in your Chambers of Commerce who are eager to attract those investments to your communities.

Above all, I hope we get to the point where none of your customers are surprised to discover that their new car—whether a domestic or a foreign brand—is actually Made right here in America.

I’ll close with a quotation. It was Walter Chrysler himself who said, “the real secret of success is enthusiasm.” As people who sell a great product, who shake hands with a buyer, and who help American families drive off in a new car—I suspect that the people in this room have a deep understanding of the ways in which success and enthusiasm are linked.

I am optimistic that we will continue to see those handshakes happen even more often in the months and years ahead, as our economy grows and our middle class gets stronger.

So, as an enthusiastic admirer of American cars and America’s auto dealers, I look forward to working with you to make sure that this administration continues to partner with businesses, to create the environment where business owners and entrepreneurs can succeed.

Thank you.